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No, it doesn't mean that. The same share can be borrowed more than once. If A borrows a share from B, who borrowed it from C, the same share is shorted twice wi
by greenshackle2 6y ago
No, it doesn't mean that. The same share can be borrowed more than once. If A borrows a share from B, who borrowed it from C, the same share is shorted twice without naked shorting.
- mmastrac 6y ago[deleted, misunderstood how this works]
- plouffy 6y agoHow do you short ? You short by borrowing a stock, and selling it. Why would lending it instead of selling it be a naked short ?
- the_pwner224 6y agoYou can recall the shares you lent anytime. So if A borrows shares to short, and lends them out to B so B can short, if A wants to close their position they can tell B to give back the share. Not naked even though A has reloaned the share.
- greenshackle2 6y agoNo. Re-lending and naked shorting are nothing alike. Actually my example kinda sucked. What's more likely to happen is that B borrows the stock from A, then sells it to C. C then lends the share to D. C doesn't know or care that the share was already borrowed once, and the only way to prevent re-lending it that way would be to make shares non-fungible, which would break more-or-less everything (then again maybe that's your goal).